'COOL' just got a lot hotter

WASHINGTON, DC – Late in the day on July 8, eight organizations representing the US and Canadian meat and livestock industries filed suit in the United States District Court for the District of Columbia to block implementing a mandatory country-of-origin labeling (COOL) rule that the US Department of Agriculture finalized in May 2013.

Plaintiffs include the American Association of Meat Processors, American Meat Institute, Canadian Cattlemen’s Association, Canadian Pork Council, National Cattlemen’s Beef Association, National Pork Producers Council, North American Meat Association and the Southwest Meat Association.

Among the plaintiffs’ complaints are charges that the final rule violates the US Constitution by compelling speech in the form of costly and detailed labels on meat products that do not directly advance a government interest. The plaintiffs further charge the 2013 regulation exceeds the scope of the statutory mandate because the statute does not permit the kind of “detailed and onerous labeling requirements” the final rule puts in place. Furthermore, they charge the rule is arbitrary and capricious because it imposes vast burdens on the industry with little to no countervailing benefit.

The eight organizations explained In the complaint that the new and complex country-of-origin labels required for meat and poultry sold at retail constitute “compelled speech.” Under the US Constitution, commercial speech may be compelled only where it serves a substantial government interest--for example, if the compelled speech is aimed at preventing spreading a contagious disease, they pointed out. Since these labels offer no food-safety or public-health benefit, but impose costs the government modestly estimates at $192 million, the government cannot require them.

“All livestock and meat processed at federally inspected establishments in the US and sold in interstate commerce are subject to the same health and safety requirements, as prescribed by the Federal Meat Inspection Act and the Poultry Products Inspection Act,” the complaint states. “Those products are also graded for quality according to a system administered by AMS [Agricultural Marketing Service] without variation based on where an animal was born or raised. In short, beef is beef, whether the steer or heifer was born in Montana, Manitoba, or Mazatlán. The same goes for hogs, chickens and other livestock.”
The organizations’ complaint adds that in addition to violating the Constitution, the new rule also violates the Agriculture Marketing Act because it exceeds the authority granted to USDA in the 2008 Farm Bill. Although Congress mandated COOL, the statute does not permit labels detailing where animals were born, raised and slaughtered -- yet that is what USDA will now require, the plaintiffs stated.

The COOL rule is also arbitrary and capricious, the associations charge. It will fundamentally alter the meat industry and choose winners and losers in the marketplace with no benefit to anyone—and at great harm to many meat companies, especially those located along US-Mexico or US-Canada borders whose companies depend upon a steady supply of livestock that may have been born in another country.
Some Texas-based companies relying on Mexican-born but U.S.-raised-and-slaughtered cattle will incur dramatic segregation costs that place their businesses at serious risk, the plaintiffs charge. Companies along the US-Canadian border will face the same issue. Since retailers must implement the new labeling requirement, they will also face “onerous segregation burdens” in ensuring that meat from animals with multiple countries of origin is not packaged together.

During a media teleconference held on the morning of July 9 hosted by the American Meat Institute, it was explained to participants that USDA proposed the new rule in March after the World Trade Organization (WTO) panel ruled in response to a complaint by Canada and Mexico that the existing country-of-origin labeling requirements violated the United States’ WTO obligations. In what the associations call a highly illogical move, USDA made COOL requirements even more complex and discriminatory against foreign meat and livestock. Canada and Mexico have already made clear that the new rule does nothing to ease the concerns that prompted their original complaint.

Retail organizations said the cost of segregating, tracking and labeling meat according to these complex new rules will force them to reject meat sourced from Canada or Mexico and stock only meat with the designation “Born, Raised, and Slaughtered in the United States.” The complaint notes new labels will need to be larger, and many grocers will have to acquire new weighing and labeling machines to handle the complex sorting of packages for each possible label.

Canadian cattle and hog producers have said they will have to accept steep discounts to make up for the downstream production costs faced by processors and retailers, according to the complaint.
Sorting and tracking livestock and labeling meat by the various ‘routes’ that livestock may take on the way to market is needlessly complex with no measurable benefits, said Mark Dopp, AMI senior vice president of regulatory affairs and general counsel. “Shoes, for example, may say ‘Made in the USA.’ They do not say ‘Leather from cattle born in Canada, harvested in the USA, tanned in South Korea and processed in the USA’, yet that is the sort of labeling that we are now being forced to apply,” he added.

“Congress mandated country-of-origin labeling for meat and poultry – not lifetime itinerary labeling. “Segregating and tracking animals according to the countries where production steps occurred and detailing that information on a label may be a bureaucrat’s paperwork fantasy, but the labels that result will serve only to confuse consumers, raise the prices they pay and put some producers and meat and poultry companies out of business in the process. Everyone loses under this rule,” Dopp concluded.

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